January 4, 2017 / 4:06 PM / 3 years ago

Romania's new government wins vote of confidence

BUCHAREST (Reuters) - Romania’s Social Democrat-led coalition government won a vote of confidence in parliament on Wednesday, as expected, returning to power after a one-year break.

Sorin Grindeanu, Romania's designated Prime Minister, looks towards press representatives in the Romanian Parliament, in Bucharest, Romania, January 4, 2017. Inquam Photos/Octav Ganea/via REUTERS

Led by Prime Minister Sorin Grindeanu, the new cabinet won by a vote of 295 to 133, parliament’s ballot count data showed. The leftist coalition has an outright majority in the legislature.

The Social Democrats (PSD) were ousted in November 2015, after a deadly fire in a Bucharest nightclub led to nationwide protests over graft and slipshod public administration. In various alliances, it had governed for a total of about 17 years since the fall of communism in 1989.

“You will find in the governing programme all the measures presented during the campaign by the PSD leader,” Grindeanu said.

“In a normal country, the government seeks higher wages for citizens, not smaller wages in the hopes that more foreign investors will come,” he said. “We want foreign investment, but one that offers well paid jobs for Romanians.”

Led by an official convicted in an election-rigging case, the PSD appears to have won the support of many Romanians with promises of increased social spending and economic security.

However, its four-year term with junior coalition partner ALDE will be closely watched by Romania’s partners in the European Union, because of concerns over government spending and a weakening of an anti-graft drive.

Some economists warn the new government is likely to breach the EU’s ceiling on the public deficit of three percent of GDP this year. A previously approved reduction in value-added tax of one percentage point went into effect this month. Two other levies were scrapped.

The PSD has also promised a 16 percent increase in the minimum wage. Increases in pensions and wages in the public health and education sectors are already approved.

The cabinet also wants to raise minimum pensions by 30 percent to 520 lei ($125) a month, increase welfare spending and scholarships and scrap several other taxes.

During committee hearings on Wednesday, Finance Minister Viorel Stefan reaffirmed plans to boost spending. Estimated annual growth of 5.5 percent, better tax collection and EU development funds should allow for more social spending and keep the budget deficit below the EU’s 3 percent ceiling, he said.

Earlier on Wednesday, Justice Minister Florin Iordache told lawmakers he would propose to Grindeanu legal revisions, including changes in the criminal code. It was unclear what the revision would entail

Together with other deputies, Iordache has backed several legislative initiatives to weaken a drive against graft.

Romania is considered one of the EU’s most corrupt states, and along with neighbouring Bulgaria, its justice system is under special monitoring by Brussels.

Reporting by Radu Marinas and Luiza Ilie; Editing by Larry King

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